Senator John McCain was a foot soldier in the deregulation revolution, which triggered the current banking crisis and the wave of foreclosures. In Michigan, his party wants to deny the right to vote to victims of the GOP’s misguided economic policies and the sleazy banking practices they encouraged.
James Carabelli, chairman of the Republican Party of Macomb County outside Detroit, said, “We will have a list of foreclosed homes and will make sure people aren’t voting from those addresses,” the Michigan Messenger.com reported September 10. Barack Obama’s campaign and the Democratic Party quickly filed a lawsuit in federal court on behalf of three Michigan residents who lost their houses to foreclosure, to stop the Michigan GOP from carrying out what Democrats called an “ugly” and “horrific” plan. Michigan is a key swing state where a few thousand votes could determine who wins its seventeen Electoral College votes.
McCain, who owns ten houses, has long been a lackey of the banking industry and a strong supporter of the industry’s efforts to weaken government safeguards against irresponsible lending. Since 1989, the financial services, insurance and real estate industries have contributed $23.8 million to McCain’s campaigns, according to the Center for Responsive Politics. This sector far outspent any other industry in making donations to the Arizona senator. Topping the list of McCain donors are Merrill Lynch ($366,035), Citigroup ($317,751), Goldman Sachs ($305,015), Morgan Stanley ($253,871), JPMorgan Chase ($207,728), Credit Suisse Group ($178,825), UBS ($178,515), Pinnacle West Capital ($164,050), Bank of America ($160,625), Lehman Brothers ($128,550) and Wachovia Corp ($121,346).
McCain was one of the Keating Five, who were behind the 1980s scandal that epitomized Washington’s culture of corruption. He and four other senators tried to intimidate federal bank regulators on behalf of McCain friend Charles Keating, an Arizona real estate developer and owner of Lincoln Savings and Loan, who had raised $1.3 million for the politicians. McCain, who received $112,000 from Keating and flew to the banker’s home in the Bahamas on company planes, attended several meetings in 1987 with federal bank regulators who were investigating Keating for swindling investors. In addition, McCain’s wife, Cindy, and her father, Jim Hensley, invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators. McCain’s Senate colleagues censured him for his poor judgement.
McCain didn’t just help one banker looking for a favor. In the 1980s he favored the deregulation of the Savings and Loan industry, which led to the industry’s collapse and a taxpayers’ bailout of more than $500 billion. The industry, like Keating’s Lincoln Savings, had balked at constraints on the S&Ls’ ability to compete with conventional banks engaged in commercial lending. They got Congress to change the rules, allowing S&Ls to begin a decade-long orgy of real-estate speculation, mismanagement, and fraud. Banks and S&Ls gobbled each other up and made loans to finance shopping malls, golf courses, office buildings and condo projects that had no logic other than a quick-buck profit. When the dust settled in the late 1980s, about a thousand S&Ls and banks (including Lincoln) had gone under, billions of dollars of commercial loans were rendered useless and the federal government was left to bail out the depositors whose money the speculators had looted.